Swiss Re spearheads bid to bring insurance on to global messaging platform.
Lloyd’s has called on IT companies to help it develop a new electronic trading system, raising the possibility of a second Kinnect-style initiative.
Lloyd’s has also been linked to a separate initiative, spearheaded by Swiss Re and other reinsurers, to create a global electronic messaging platform for insurance companies, using existing technology from the finance sector.
Both initiatives – still in their early stages – would involve the use of a central hub to exchange electronic messages. Companies which chose to connect to the hub would be able to exchange information with any other company similarly connected – which could ultimately allow the placement of risks with any insurer worldwide.
A Lloyd’s spokesman confirmed that some IT companies had been sent a pre-qualifying questionnaire as the first step in the tender process. Market sources suggested that IBM and Xchanging had been invited to take part, but the spokesman refused to confirm this.
Lloyd’s’ last attempt to implement a market-wide electronic reform solution, Kinnect, was scrapped early in 2006 at an estimated cost of £70m to the market. A source said: “Any system put in place by Lloyd’s would probably be a London-wide system. But I do not think this will be anything like Kinnect.”
In a separate development, a business plan led by Swiss Re and involving other European reinsurers, has outlined the possibility of insurers using the existing Swift global financial messaging hub.
According to a Swiss Re spokesman, Swiss Re was meeting a group of European reinsurers and brokers this week to discuss the plan.
He said: “This, among other initiatives we are working on, is with the goal of reducing costs and improving data quality. We will be able to provide more information once this initial meeting has taken place.”
Over 8,000 financial institutions in 208 countries use the Swift hub, which handles over 600 million messages a year. Swift is a co-operative established by financial institutions, and based in Belgium.m.